Broad Top Area Medical CenterNon-Profit

Finding 2024-001: Internal Control Over Financial Reporting Criteria and Condition: Internal controls over financial reporting should be designed and in place to prevent, detect, and correct material misstatement in the financial statements in a timely manner. The internal controls were unable to prevent, detect, and correct a material error in the preparation of the financial statements as of and for the year ended February 29, 2024, in a timely manner. This resulted in resulted in a significant adjustment related to assets and expenses. Cause: Existing internal controls over financial reporting require that management perform meaningful analysis of internal records and general ledger accounts on a regular basis. Managements analysis of the allowance for credit losses and credit loss expense was not substantive enough which results in financial statements that contain a material error. Questioned Costs: None Recommendations: We recommend that management improve upon established internal controls related to review of accounts receivable and the allowance for credit losses to ensure the estimate is adequate going forward. Views of Responsible Officials and Planned Corrective Actions: Management is taking steps to improve their analysis of the allowance for credit losses to ensure it is adequate for all future periods.

Finding 2024-002: Timely Single Audit Submission Criteria and Condition: Single Audits must be completed and submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the issued auditors’ report. or nine months after the end of the audit period. The Single Audit was not timely completed and submitted to the Federal Audit Clearinghouse within nine months form the end of the audit period. Context: The Center provided information to their prior third party auditor in a timely fashion, however the auditor of record for the year ended June 30, 2023 was unable to process the information in a timely fashion. This resulted in the financial statements and Single Audit to not be finalized and issued in order to be submitted to the Federal Audit Clearinghouse within nine months of the end of the audit period. Effect: The data collection form and reporting package for the Single Audit for the year ended February 28, 2023 were not submitted within the specified timeframe resulting in award drawdown restrictions. Questioned Costs: None Cause: Internal controls over reporting and compliance were not effective at ensuring that the required reports were being completed and submitted in a timely manner. Recommendations: We recommend that management improve their reporting processes and controls to ensure that the Single Audit is completed and submitted to the Federal Audit Clearinghouse in a timely manner. Views of Responsible Officials and Planned Corrective Actions: Management is taking steps to improve the internal controls over financial reporting and compliance to ensure that reporting can be completed in an accurate and timely manner. In addition, management has engaged a new third party auditor to help ensure timely filing. These changes include updates of internal processes.

Criteria: 42 CFR 51c.303(f) and 42 CFR 51c.303(g) requires a community health center grant recipient to have a sliding fee discount (?SFD?) program, and to establish systems for determining eligibility, billing and collection to ensure that payments are secured from patients for services in accordance with the SFD program. Chapter 9 of the Health Center Program Compliance Manual (the ?Compliance Manual?) contains requirements for a SFD program, along with guidance and other considerations as to how a health center will demonstrate compliance with these requirements. The Compliance Manual allows certain flexibility for the Center to determine a sliding fee discount program that is appropriate for its patient base; however, once such a program has been approved by the board it must be adhered to. It also allows a health center to establish a nominal fee for services that may be collected from patients at or below 100% of the federal poverty guideline (?FPG?), and also states that patients who are eligible for a SFD and have third-party insurance coverage should not be charged more for out-of-pocket costs than they would have paid under the SFD program. The Center has a Patient Accounting Sliding Fee Schedule within its policies and procedures which has been approved by the board of directors. This policy requires sliding fee discount applications to be completed for all patients. This application form contains a box that is to be checked if a patient declines the program, and the policy requires signature of waiver by the patient. All applications and proof of household income are to be maintained as part of the patient?s electronic health record. Applications are required to be renewed annually, and the sliding fee schedule year runs from March 1st to February 28th or 29th each year. Furthermore, this policy allows for a nominal charge of $20 to be charged to patients at or below 100% of the FPG. Condition/Context: As part of our audit of the Health Center Program cluster, we noted that the Center did not properly maintain all applications, whether accepted or declined, that were completed by patients related to sliding fee discounts received for the year-ended February 28, 2021. Such applications were not properly maintained for eight (8) out of the fifty-two (52) files selected for testing. Four (4) of the files selected for testing did have a completed applications but not for the fiscal year in which the services were provided, and four (4) of the files contained no application. All of these individuals had insurance coverage and the medical claims were submitted to their insurance company for payment. The sample was not statistically valid. Questioned Costs: Could not be determined. Effect: Due to the lack of documentation that was maintained, it is possible that patients were denied a sliding fee discount despite being eligible to receive one. Maintaining such supporting documentation is a normal and required component of internal control over compliance; failure to maintain such documentation constitutes a material weakness. Cause: There had been some turnover in the front desk position at the some of the Center?s sites. Staff training had occurred, but staff was new and inexperienced. In addition, at another acute care site, there were times during the year when they were abnormally busy and staff were juggling duties of multiple roles and not focused on making sure all proper sliding fee applications were completed and maintained. Recommendation: We recommend that SFD program applications and proof of household income are maintained for all patients within the electronic health record in accordance with the Center?s policy. We also recommend continuing re-education to all employees responsible for obtaining and maintaining such applications immediately. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.

Criteria: 45 CFR 75.342(b) requires a community health center grant recipient to submit performance reports at the interval required by the U.S. Department of Health and Human Service awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Current terms and conditions of the Center?s grant require the Center to submit the annual Federal Financial Report (FFR) for the budget period ending January 31st by April 30th of each year. In addition, 45 CFR 75-302(b) requires that the financial management system of each non-federal entity provide accurate, current, and complete disclosure of the financial results of each Federal award program in accordance with the reporting requirements set forth in 45 CFR 75.341 and 75.342. Condition/Context: During testing of the Center?s compliance with the reporting requirements in connection with the federal grants, we noted that the annual FFR for the budget period ending January 31, 2021 was not submitted until May 28, 2021; almost a month after the due date of April 30, 2021. Furthermore, the amount of Total Federal Expenditures for the budget period reported could not be reconciled to the actual federal expenditures for the grant period per the financial reporting system. In addition, when we examined the Federal Cash Transactions Report for the quarter ending June 30, 2020, the amounts reported as cash receipts and disbursements did not reconcile to the actual cash drawn down during that time period per the detail obtained from PMS. The sample was not statistically valid. Questioned Costs: N/A Effect: The Center did not comply with the reporting requirements of their Federal Award. Cause: During 2020, HRSA implemented an initiative to integrate the annual SF-425 FFR reporting into the Payment Management System (PMS). Previously, this annual FFR was completed using HRSA?s Electronic Handbooks (EHBs) but beginning in late 2020 and early 2021, HRSA now requires this annual FFR to be submitted through PMS. When this transition from EHBs to PMS occurred, many entities reported errors with the pre-populated fields which would generate incorrect information. The Center noted that there was an issue with the prepopulated field on their FFR for the Cumulative Funds Authorized. The Center reached out to their grant management official through HRSA to get this amount corrected before the due date of April 30th, 2021; however, the issue was not resolved and the prepopulated field was not updated to the correct amount until a few weeks later. The Center waited to submit the annual FFR until the prepopulated field was corrected. In addition, the Center engaged an outside consultant to prepare their annual FFR form for the grant year ending January 31, 2021. The transition as well as the integration of the annual FFR reporting into the PMS software contributed to inaccuracies noted in the reports. Recommendation: A procedure and process should be developed to ensure that all reporting is completed by their required due dates, and that all reports are accurately prepared. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.

Criteria: 42 CFR 51c.303(f) and 42 CFR 51c.303(g) requires a community health center grant recipient to have a sliding fee discount (?SFD?) program, and to establish systems for determining eligibility, billing and collection to ensure that payments are secured from patients for services in accordance with the SFD program. Chapter 9 of the Health Center Program Compliance Manual (the ?Compliance Manual?) contains requirements for a SFD program, along with guidance and other considerations as to how a health center will demonstrate compliance with these requirements. The Compliance Manual allows certain flexibility for the Center to determine a sliding fee discount program that is appropriate for its patient base; however, once such a program has been approved by the board it must be adhered to. It also allows a health center to establish a nominal fee for services that may be collected from patients at or below 100% of the federal poverty guideline (?FPG?), and also states that patients who are eligible for a SFD and have third-party insurance coverage should not be charged more for out-of-pocket costs than they would have paid under the SFD program. The Center has a Patient Accounting Sliding Fee Schedule within its policies and procedures which has been approved by the board of directors. This policy requires sliding fee discount applications to be completed for all patients. This application form contains a box that is to be checked if a patient declines the program, and the policy requires signature of waiver by the patient. All applications and proof of household income are to be maintained as part of the patient?s electronic health record. Applications are required to be renewed annually, and the sliding fee schedule year runs from March 1st to February 28th or 29th each year. Furthermore, this policy allows for a nominal charge of $20 to be charged to patients at or below 100% of the FPG. Condition/Context: As part of our audit of the Health Center Program cluster, it was noted that the Center did not properly maintain all applications, whether accepted or declined, that were completed by patients related to sliding fee discounts received for the year-ended February 29, 2020. Such applications were not properly maintained for six out of the fifty-two files selected for testing. Four of the files selected for testing did not have a completed application for the fiscal year in which the services were provided, one of the files contained no application, one of the files contained an application that had been approved but it was not properly signed. All of these individuals had insurance coverage and the medical claims were submitted to their insurance company for payment. The sample was not statistically valid. Questioned Costs: Could not be determined Effect: Due to the lack of documentation that was maintained, it is possible that patients were denied a sliding fee discount despite being eligible to receive one. Maintaining such supporting documentation is a normal and required component of internal control over compliance; failure to maintain such documentation constitutes a material weakness. Cause: Due to turnover in management and staff, the Center was not properly documenting the required steps related to sliding fee visits in accordance with internal and Federal requirements. Recommendation: We recommend that SFD program applications and proof of household income are maintained for all patients within the electronic health record in accordance with the Center?s policy. We also recommend continuing re-education to all employees responsible for obtaining and maintaining such applications immediately. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.

Criteria: 42 CFR 51c.303(d) requires a community health center grant recipient to develop and maintain management and control systems that are in accordance with sound financial management procedures. Accordingly, the Center has established a policy whereby any changes to an employee?s department assignment, position, pay rate or other relevant personnel change must be documented on a payroll change form. This form also contains signatures noting approval of the change and the effective date of the change. These forms are to be maintained in employee personnel files. Condition/Context: During testing of the Center?s allowable costs incurred in connection with the Federal grants, we noted two employees whose personnel files did not include the required documentation (the payroll change form) supporting the employee?s wage rate within the Center?s accounting system. The sample was not statistically valid. Questioned Costs: Could not be determined. Effect: Due to the lack of documentation maintained, it is possible that grant funding was improperly expended for an employee whose wage rate was not properly documented or input into the accounting system. Maintaining such supporting documentation is a normal and required component of internal control over compliance; failure to maintain such documentation constitutes a significant deficiency. Cause: The personnel form was not maintained due to an oversight at the Center. Recommendation: Procedures should be established to ensure that the Center is maintaining documentation and support for employee wages and personnel files. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.

Criteria: 42 CFR 51c.303(f) and 42 CFR 51c.303(g) requires a community health center grant recipient to have a sliding fee discount (?SFD?) program, and to establish systems for determining eligibility, billing and collection to ensure that payments are secured from patients for services in accordance with the SFD program. Chapter 9 of the Health Center Program Compliance Manual (the ?Compliance Manual?) contains requirements for a SFD program, along with guidance and other considerations as to how a health center will demonstrate compliance with these requirements. The Compliance Manual allows certain flexibility for the Center to determine a sliding fee discount program that is appropriate for its patient base; however, once such a program has been approved by the board it must be adhered to. It also allows a health center to establish a nominal fee for services that may be collected from patients at or below 100% of the federal poverty guideline (?FPG?), and also states that patients who are eligible for a SFD and have third-party insurance coverage should not be charged more for out-of-pocket costs than they would have paid under the SFD program. The Center has a Patient Accounting Sliding Fee Schedule within its policies and procedures which has been approved by the board of directors. This policy requires sliding fee discount applications to be completed for all patients. This application form contains a box that is to be checked if a patient declines the program, and the policy requires signature of waiver by the patient. All applications and proof of household income are to be maintained as part of the patient?s electronic health record. Applications are required to be renewed annually, and the sliding fee schedule year runs from March 1 to February 28 each year. Furthermore, this policy allows for a nominal charge of $20 to be charged to patients at or below 100% of the FPG. Condition/Context: As part of our audit of the Health Center Program cluster, it was noted that the Center did not properly maintain all applications, whether accepted or declined, that were completed by patients related to sliding fee discounts received for the year-ended February 28, 2019. Such applications were not available for eighteen out of the forty-eight files selected for testing. Fourteen of the files selected for testing did not have a completed application for the fiscal year in which the services were provided, two of the files contained no application, one of the files contained an application but it was not properly signed, and one file had an application that was completed but a prior year form with incorrect federal poverty guidelines was utilized. Twelve of these individuals had insurance coverage and the medical claims were submitted to their insurance company for payment. In addition, we noted that for five of the ten individuals which had completed the application for the SFD, proof of income was not properly maintained in the file. The sample was not statistically valid. Questioned Costs: Could not be determined Effect:Due to the lack of documentation that was maintained, it is possible that patients were denied a sliding fee discount despite being eligible to receive one. Maintaining such supporting documentation is a normal and required component of internal control over compliance; failure to maintain such documentation constitutes a material weakness. Cause: Due to turnover in management and staff, the Center was not properly documenting the required steps related to sliding fee visits in accordance with internal and Federal requirements. Recommendation: We recommend that SFD program applications and proof of household income are maintained for all patients within the electronic health record in accordance with the Center?s policy. We also recommend re-education to all employees responsible for obtaining and maintaining such applications immediately. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.

Criteria: 45 CFR 75.342(b) requires a community health center grant recipient to submit performance reports at the interval required by the U.S. Dept of Health and Human Services awarding agency or pass-through entity to be informed improvements in program outcomes and productivity. Current terms and conditions of the Center?s grant require the Center to submit the annual Federal Financial Report (FFR) for the budget period ending January 31st by April 30th of each year. In addition, 45 CFR 75.302(b) requires that the financial management system of each non-federal entity provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in 45CFR 75.341 and 75.342. Condition/Context: During testing of the Center?s compliance with the reporting requirements in connection with the federal grants, we noted that the annual FFR for the budget period ending January 31,2019 was not submitted until May 6, 2019; six days after the due date of April 30, 2019. In addition, the amount of Total Federal Expenditures for the budget period reported was overstated by $58,499, and the total reported as Unobligated Balance of Federal Funds was understated by $58,499. The sample was not statistically valid. Questioned Costs: N/A Effect: The Center is not in compliance with the reporting requirements of their Federal award.. Cause: Due to turnover in management and staff at the Center, new management was unfamiliar with all of the specific reporting requirements relating to the Federal award. The Center?s new management personnel made a mistake in recording the expenditures on the annual FFR. Recommendation: We recommend that a procedure and process be established to ensure that all reporting is completed by the due dates, and that reports are accurately prepared. We encourage the Center to educate all new management with the reporting requirements of the Federal award. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.

Criteria: The Center is required to undergo and complete a Single Audit and file the Single Audit and related Data Collection Form within 9 months followings its year-end. Condition/Context: The Center?s Single Audit and reporting package was delayed for the year ended February 28, 2019 beyond the 9-month due date. Questioned Costs: N/A Effect: The Center is not in compliance with the Single Audit reporting requirements Cause: The Center was behind schedule in completing its Single Audit due to problems experienced with its billing system, as well as turnover in management and staff throughout the year. Recommendation: We recommend that the Center develop an internal procedure to ensure the books are closed expediently to enable the preparation and completion of the Single Audit within the appropriate time frame. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.

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